BAY CITY, MI — Weeks after rejecting a tax break for a proposed low- to medium-income housing development, the Bay City Commission on Monday, Feb. 3, voted to approve a tax break for a massive renovation project to Maplewood Manor, a low-income senior housing facility.

By a vote of 6-3, the City Commission granted a payment-in-lieu-of-taxes, or PILOT, agreement that will decrease the city’s tax revenue on the property from $42,447 per year to $10,674 for about the next 50 years.

The tax break is a key piece of the puzzle for the Bay City Housing Commission to secure $9 million from the Michigan State Housing Development Authority — or MSHDA — to renovate the facility at 1200 N. Madison Ave., and make sure it can survive for another 35 years. MSHDA scores its tax credit applications using a variety of factors, one being support from the local municipal government via some kind of a tax break.

Following the vote, Doug Rise, director of the Bay Area Housing Commission, wiped his brow and let out a sigh of relief.

“We were fairly confident coming in, but you can never be sure,” said Rise. “We now have all the pieces in place and are thankful for the commission’s decision.”

The next step for Rise is to file an application with MSHDA before a Feb. 14 deadline. From there, the application process typically takes about three months before any grants are made, Rise said.

If successful with MSHDA, the Bay City Housing Commission also hopes to secure a $4 million long-term mortgage from the Federal Housing Administration. Of the total $13 million sum, $9.7 million would go toward Maplewood renovations. The remaining $3.3 million would allow a new, for-profit joint partnership of the Bay City Housing Commission and Bingham Farms-based MHT Housing, Inc., to purchase the property from the nonprofit housing commission.

As part of the deal, Bay City receives $300,000 following the sale of the property, and the Bay City Housing Commission has agreed to commission a citywide housing study that could cost as much as $100,000. To entice the City Commission, the Housing Commission paid $30,000 to McKenna Associates, a Northville-based community planning and design firm, to develop a plan of the neighborhood surrounding Maplewood Manor. A citywide housing study would be in similar scope to the Maplewood plan, said Rise.

Last month, the City Commission rejected a PILOT agreement with Ohio-based Woda Group, the developer of Victor’s Landing, a low- and medium-income housing project, that could still be built on the West Side of the Saginaw River between Ionia and Mundy avenues.

At the time, Stamiris said the city needed to hold the line when it came to issuing tax breaks.

Bay City Commissioner Lynn Stamiris, 1st Ward

“Maybe this is the first one — we need to start some place,” he said at a Jan. 13 City Commission meeting, speaking on the Victor’s Landing PILOT. “I’m going to have a hard time justifying issuing new PILOTs for any project that comes down the road.”

On Monday, Stamiris said the fact that Maplewood is an existing facility factored into his decision to approve the PILOT.

“The city has had this relationship with Maplewood, which is different than any new development,” he said. “For any new, non-existing developments, I’ll have hard time granting any new PILOTs.”

Commissioner Elizabeth Peters, 2nd Ward.

Commissioner Peters said the plan at hand, which sells Maplewood Manor from a nonprofit entity to a for-profit entity, had too many unanswered questions.

“I’m having a difficult time figuring out why we would take $1 million of our residents money to have a for-profit company benefit,” she said, calculating the approximate amount of tax dollars over the course of the agreement. “I want to see Maplewood Manor succeed, but I can’t support the way that it’s structured.”

Elliott said the city will have a difficult time finding $30,000 to make up for the tax break given to the project.

“Until we have some mechanism in place to give tax breaks for our residents, I’m not going to support any PILOTs,” he said.